The Federal Historic Preservation Tax Incentives Program is the single-largest Federal program that specifically supports historic preservation and is one of the nation's most effective programs to promote historic preservation and community revitalization. The AHC is the point of contact for anyone in Alabama who applies for this tax incentive.

The Federal Historic Preservation Tax Incentives program includes a 20% income tax credit for the rehabilitation of historic, income-producing buildings. On December 22, 2017, Public Law No: 115-97 was signed and enacted, amending the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. Pub. L. 115-97 (Sec. 13402) modifies the 20% Historic Rehabilitation Tax Credit as well as provides certain transition rules. These and other changes to the Internal Revenue Code may affect a taxpayer's ability to use the 20% Historic Tax Credit. Pub. L. 115-97 also repeals the 10% Rehabilitation Tax Credit for non-historic buildings. The text of Pub. L. 115-97 is available at www.congress.gov. Applicants requesting historic preservation certifications by the National Park Service as well as others interested in the use of these tax credits are strongly advised to consult an accountant, tax attorney, or other professional tax adviser, legal counsel, or the Internal Revenue Service regarding the changes to the Internal Revenue Code related to Pub. L. 115-97.

A 20% federal tax credit is available for the rehabilitation of properties listed in the National Register and used for income-producing purposes. Project expenditures must be substantial, meaning they exceed the adjusted basis of the property, and the rehabilitation must be approved by the National Park Service. Work must follow Rehabilitation Standards that protect the historic character and historic materials of the building. The building must be determined eligible for the program and the proposed rehabilitation must be approved ahead of time by the National Park Service.

The Alabama Historical Commission assists owners with the three-part application which necessary to have a project approved. It is important for owners interested in this program to read all of the National Park Service and Internal Revenue Service requirements. Involving your accountant, your architect and contractor, and the AHC early in the planning process is highly recommended.

Historic buildings in Alabama may be assessed for ad valorem purposes at the lowest tax rate. This benefits historic property that is income-producing since owner-occupied historic homes are already assessed at the lowest tax rate. Historic buildings are listed (or eligible for listing) in the National Register of Historic Places. To determine if your property is eligible for this benefit, submit an Ad Valorem Assessment Application, with all the required attachments, to the Alabama Historical Commission.